Locaweb Serviços de Internet SA (BVMF:LWSA3) full-year results are out and analysts issue new forecasts

it’s a good week Locaweb Internet Services Company (BVMF:LWSA3) shareholders, as the company just released its latest annual results, the share price rose 3.0% to 5.83 reais. Overall, it was a pretty poor result; while revenue was in line with expectations of R$1.3b, statutory losses ballooned to R$0.13 per share. This is an important time for investors, as they can track a company’s performance in the report, see what experts are forecasting for next year, and find out if there have been any changes to expectations for the company. So we’ve gathered the latest post-earnings statutory consensus estimates to get a feel for what next year will look like.

Check out our latest analysis for Locaweb Serviços de Internet

Earnings and revenue growth
BOVESPA: LWSA3 Earnings and Revenue Growth March 24, 2024

Taking into account the latest results, the current consensus among Locaweb Serviços de Internet’s seven analysts is for 2024 revenue of R$1.48b. This would reflect a 15% increase in its revenue over the past 12 months. Earnings are expected to improve, with Locaweb Serviços de Internet forecasting statutory profits of R$0.13 per share. However, before the latest earnings, analysts were expecting revenue of R$1.47b and earnings per share (EPS) of R$0.14 in 2024. Analysts appear to have become more negative on the business following the latest earnings report, with a slight cut to next year’s earnings per share.

The consensus price target held steady at R$8.08, with analysts appearing to vote that their lower forecast earnings are not expected to cause the share price to fall in the foreseeable future. Another way to think about price targets, though, is to look at the range of price targets offered by analysts, since a wide range of estimates could suggest different views on possible results for the business. The most optimistic Locaweb Serviços de Internet analyst has a price target of R$11.00 per share, while the most pessimistic values ​​it at R$5.00. Notice the huge gap in analyst price targets? What this means for us is that there is a fairly wide range of possible scenarios for the underlying business.

Now looking at the bigger picture, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth forecasts. It’s clear that Locaweb Serviços de Internet’s revenue growth is expected to slow significantly, with revenue expected to grow at an annualized rate of 15% by the end of 2024. This compares to a historical growth rate of 31% over the past five years. Compare this to other companies in the industry with analyst coverage, which are expected to grow revenue (together) at 8.8% annually. Even after forecasting slower growth, Locaweb Serviços de Internet appears to be growing significantly faster than the industry as a whole.

bottom line

Most worryingly, analysts have cut their earnings per share estimates, suggesting Locaweb Serviços de Internet may be facing business headwinds. Happily, there are no major changes to revenue forecasts, with the business still expected to grow faster than the industry as a whole. The consensus price target held steady at R$8.08, with the latest estimates not enough to have an impact on its price target.

With that in mind, we wouldn’t be too quick to draw conclusions about Locaweb Serviços de Internet. Long-term profitability is much more important than next year’s profits. We predict that Locaweb Serviços de Internet will be launched in 2025 and you can view them for free on our platform.

Don’t forget that risks may still exist.For example, we have determined 1 Warning Sign for Locaweb Internet Service You should know this.

Valuation is complex, but we’re helping to make it simple.

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This article from Simply Wall St is general in nature. We only use unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended to provide financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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